Is There a Future for Wolfspeed?
Key Points
Wolfspeed had to file Chapter 11 bankruptcy due to its debt load.
While that helped, this company still saw its revenue drop and losses increase in its most recent fiscal year.
- 10 stocks we like better than Wolfspeed ›
Semiconductor company Wolfspeed (NYSE: WOLF) has delivered one of the market's biggest turnarounds this year. A Chapter 11 bankruptcy restructuring in late September eliminated 70% of the company's debt and drove its share price up over 2,000%.
The question is whether Wolfspeed has real long-term value or is just another meme stock. Here's what prospective investors need to know.
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Wolfspeed is still in financial trouble
Restructuring wiped away a large portion of Wolfspeed's debt -- and, it should be mentioned, all of the company's legacy shares, which were replaced with just 1.3 million new shares for existing shareholders. Even though Wolfspeed is in a less precarious position, bankruptcy never fixes everything.
In its 2025 fiscal year (which ended on June 30, 2025), Wolfspeed reported $758 million in revenue, a 6% year-over-year decrease. The cost of that revenue was $879 million, a 20% increase. Neither of those numbers is moving in the right direction. Wolfspeed had to spend significantly more money to make less, and overall, it lost $1.6 billion.
On a positive note, Wolfspeed is currently trading at about 1 times sales, which is dirt cheap for a semiconductor company. Its semiconductors can also handle higher voltages and temperatures, a key advantage over traditional options. Wolfspeed could still have a future, considering that it makes a high-quality, cutting-edge product. But given the risk involved, I wouldn't consider anything more than a small investment in it.
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Lyle Daly has no position in any of the stocks mentioned. The Motley Fool recommends Wolfspeed. The Motley Fool has a disclosure policy.
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